Thursday, 7 May 2015



The only paper in the review that is to our minds at all to be compared with it for suggestiveness and literary power, is the one on "Industrial Co-operation," by Frederick Harrison. The co-operative principle is a new discovery in social dynamics; and not a few social philosophers have regarded it as the one thing that has been wanting to make the mechanism of society perfect. According to the apostles of co-operation, it was to bring about that revolution in the relations of the various classes of society to each other which optimists have dreamed of in their Utopias. Springing from working-men, the invention of working-men, it is the first spontaneous effort of the working-man to raise his condition, against which neither moralists nor jurists have anything to say. The movement, though a class movement, is without offence to any other class. It is founded on the principles of partnership, but it does not partake of communism. It tends to make the poor rich, but it does not tend to make the rich poor. By associating labour with capital, by giving the labourer an equal interest with the producer, by giving him, in fact, on equal share of the profit arising out of the produce, it elevates his condition, and invests him with a new character altogether—with the character of capitalist as well as labourer. This is the claim which the new doctrine makes upon the belief of its disciples, and it is this claim which the Fortnightly Reviewer investigates with a masterly hand. He denies altogether that the co-operative principle, whatever its views may be, has brought about any such revolution in the relations of capital to labour as it pretends to. "While acknowledging the indirect benefit of "the common store," the freedom from debt, the accumulation from saving, and the business experience, he looks upon them as purely economic arrangements of practical convenience, having the same utility as the penny post or the savings bank, which "cannot affect the social conditions of labour."

" Flourishing as co-operation clearly is in a pecuniary sense (with the exception of a very small number of manufacturing societies to be noticed presently), the whole of the co-operative societies throughout the kingdom are simply stores, i.e., shops for the sale of food, and sometimes clothing. These, of course, cannot affect the condition of industry materially. Labour here does not in any sense share in the produce with capital. The relation of employer and employed remains just the same, and not a single workman would change the conditions of his employment if the store were to extinguish all the shops of a town. In such an extreme case, the workmen would still be hired for wages in the ordinary competition of labour, for the shops do not employ any of them. The cloth, flour, tea, and meat which the store now supplies, have all been made under the same conditions as before, and are simply purchased in open market in the ordinary way. The cotton goods sold at the store hare probably been grown by the labour of negroes, and manufactured under the merest rule of competition. If co-operation (so far as the stores are concerned) were developed to a point beyond the wildest dreams of its friends; if it absorbed the entire retail trade of the country, and there were no such thing as a shop left for rich or poor, it would still, for any direct effect it has, leave the 'labour market' just where it found it, for not a single article would be produced (though all would be distributed) in a different way from heretofore. Hence a 'store,' as such, does not affect the true labour question directly. So that what we mean when we say that 'co operation' is a great movement, is, that working men have devised a highly convenient and economic plan of buying their food."

Stores, in fact, are simply joint stock companies for the sale of clothing, &c. and he considers the new working men's clubs to be possessed of a great many of the advantages of the co-operative system, and to be free from many of its defects.

But the co-operative system is not confined to the co-operative store, and this Mr. Harrison allows. There are co-operative societies which are employers of labour. Here, then, the system does grapple with the position of labour and capital. But what is the result? The manufacturing societies are few, they are not yet succcesful as speculations, and they do nothing but pay the labourer his ordinary market wages. Frequently the shareholders are labourers, but very often they are not; and if they want labour, they go into the market, and give the price as fixed by competition. As a rule, labourers are not share-holders, because, as a rule, it is the tendency of labour, the moment it becomes possessed of capital, to quit the ranks of the labourer, and join those of the capitalists. A good deal has been said of the famous Rochdale flour-mill, established in 1844. What, however, has it proved? Simply, that it is quite possible for a cotton-mill to be worked succeesfully on the co-operative principle.

" What, however, they have not proved is the possibility of a mill being wholly owned by those who work it, and of labour receiving more than the ordinary market share of the profits. The mill was founded on the principle of dividing all profits (after satisfying all expenses and the interest on fixed capital) equally between the shareholders and the workmen, every £100 received in wages counting in the distribution of the dividend the same as every £100 inverted in.shares. This principle was a real experiment to institute a new condition of labour. The mill had not worked long, however, before (in 1861) this principle, alter a severe struggle, was abandoned, and no efforts of the minority, backed by influential friends of the movement, have succeeded in restoring it. This, therefore,in the great home of co-operation, has for the present decided the issue. The question how to give the labourer a larger share of the profits has failed of solution. A body of co-operative capitalists, it is there seen, hire and pay their own workmen on tho ordinary terms of tho market, and under the rule of simple competition. This is the greatest blow, in fact, which the system has ever yet sustained, and is one which, if it cannot be reversed, stamps it as incompetent to affect permanently the conditions of industry. In spite of all efforts which faith, hope, and charity make to conceal it, this decision has planted a deep root of division amongst the co-operative body, and has broken the confidence of their most zealous friends. Some of the most active friends of the movement as loudly justify it as others loudly condemn it. And a long controversy been carried on with great energy and no result. But a vote of tho whole body of co-operators would undoubtedly show for the economic party an overwhelming majority.

"But it may be said that, supposing co-operation distinctly to surrender or disclaim every thought of affecting the existing conditions and rights of capital, it is fulfilling a great mission if it enables the workmen to share the capital ; and the Rochdale cotton mill, although it does not divide its profits amongst its workmen, still pays them as share holders, and in one way or other the workmen themselves obtain the share of the profits, and gain the security and independence of an invested fund. Unfortunately, this it not so. The shares of this mill are now in a very large proportion held by men who are not workmen in it, and not a small proportion is held by men who are not now working men at all. The number of shares owned by the ordinary 'hands' is not sufficient to establish any very important principle. And until this is the case, and that permanently, nothing decisive is done."

So that, as the herald of a great social and moral millennium, the co-operative principle, according to Mr. Harrison, is a disappointment.

The Australasian 24 March 1866

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